| Employer Health Insurance |
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Fully Insured Health Care Plans
When an employer wants to provide health insurance to their employees, they have a number of options to consider. One way to do it is
to look at the available plans different insurance companies offer in their state. The employer can decide what type of plan they want
and what kinds of benefits their plan is going to have. They then can offer this plan- or maybe a choice of plans- to their employees.
When an employer decides to get insurance in this way, it is called “fully insured”. The New Hampshire Insurance Department regulates
fully insured plans since they are an insurance “product” that is sold in the state of New Hampshire. To see a list of rules which apply
to fully insured plans sold in New Hampshire click on picture at the right.
Self Insured Health Care Plans
Sometimes an employer, especially if it is a large employer, will decide to pay their employee’s medical bills directly instead of paying an insurance company.
This is called “self insured” or “self-funded”.
In these plans it is the employer covering the medical costs and assuming the risks. The employer may decide to have an insurance company administer the
plan - that is bill for premiums and handle paperwork - so it may look just like a “fully insured” plan. There may even be an insurance company’s name on the
paperwork and on the insurance card.
You will need to ask the person who handles insurance at your work to find out if it is a self insured plan. This is important because this type of insurance is
not regulated by the state’s insurance department as it is not an insurance “product” that is sold in the state. Instead, it is regulated by the Department
of Labor and while it has to follow federal laws (please see box about ERISA below), it does not need to follow state laws. An example of this is Connor’s
Law- a bill that was passed recently in New Hampshire requiring insurance companies to provide coverage of certain Autism therapies, such as Applied
Behavior Analysis (ABA) therapy. Since Connor’s Law is a state law, it only applies to insurance products sold in the state of NH. (for more information on
Conner's Law follow this link)
When an employer wants to provide health insurance to their employees, they have a number of options to consider. One way to do it is
to look at the available plans different insurance companies offer in their state. The employer can decide what type of plan they want
and what kinds of benefits their plan is going to have. They then can offer this plan- or maybe a choice of plans- to their employees.
When an employer decides to get insurance in this way, it is called “fully insured”. The New Hampshire Insurance Department regulates
fully insured plans since they are an insurance “product” that is sold in the state of New Hampshire. To see a list of rules which apply
to fully insured plans sold in New Hampshire click on picture at the right.
Self Insured Health Care Plans
Sometimes an employer, especially if it is a large employer, will decide to pay their employee’s medical bills directly instead of paying an insurance company.
This is called “self insured” or “self-funded”.
In these plans it is the employer covering the medical costs and assuming the risks. The employer may decide to have an insurance company administer the
plan - that is bill for premiums and handle paperwork - so it may look just like a “fully insured” plan. There may even be an insurance company’s name on the
paperwork and on the insurance card.
You will need to ask the person who handles insurance at your work to find out if it is a self insured plan. This is important because this type of insurance is
not regulated by the state’s insurance department as it is not an insurance “product” that is sold in the state. Instead, it is regulated by the Department
of Labor and while it has to follow federal laws (please see box about ERISA below), it does not need to follow state laws. An example of this is Connor’s
Law- a bill that was passed recently in New Hampshire requiring insurance companies to provide coverage of certain Autism therapies, such as Applied
Behavior Analysis (ABA) therapy. Since Connor’s Law is a state law, it only applies to insurance products sold in the state of NH. (for more information on
Conner's Law follow this link)
If you get health insurance through your work
| ERISA: The Employee Retirement Income Security Act The Employee Retirement Income Security Act of 1974 (ERISA) is a federal law that sets minimum standards for health plans offered at work. It provides protections for people who may have these plans. ERISA allows companies to set up self-funded plans that are governed by federal law and exempt from state insurance regulations. ERISA laws have been amended over the years in important ways, including COBRA and HIPAA. Advocacy groups continue to work to amend ERISA laws. If you feel your company’s health plan does not cover important services your family needs, speak to your employer and tell them; they may not know something is important. For more information about ERISA, follow this link to the U.S. Department of Labor’s website |
How the Affordable Care Act will Affect Employer Financed Insurance
The Affordable Care Act has made some important changes to the choices you will
have for insurance. In 2014, each state will have an insurance “market place” on
the Internet called an Affordable Insurance Exchanges. Here people will be
able to shop for health insurance if they are unable to get it at work or if what
is offered at work is too expensive. Through the Exchanges, people will be able
to qualify for tax credits based on their income to help offset the cost of
insurance.
Employers will also be able to shop for insurance to offer their employees in a
Health Benefit Exchange made for small businesses. Employers will not HAVE to provide insurance but they will be encouraged
to - and encouraged to make it affordable. If you work at a place that has under 25 employees, then your employer can get tax
credits to encourage them to provide insurance to their workers, but they do not HAVE to provide it. If an employer has over 50
employees, they still do not HAVE to provide insurance, but if they don’t and their workers go to the Exchange to find insurance
AND their income is low enough that they are eligible for tax credits, then the employer will have to pay a penalty.
The Affordable Care Act will also affect Self Insured plans with new requirements that will make them more like Fully Insured
plans. These changes will affect all new plans and will include things like (please note this is not a complete list):
• Not allowing lifetime and certain annual limits
• No longer able to cancel a person’s policy due to an unrelated error- for example, a child has medical
bills due to a sudden illness. The insurance company suddenly finds the child ineligible for coverage
because acne was not included on the insurance application by mistake.
• Coverage of preventive health services
• Extension of dependent coverage to age 26
• Annual quality of care reporting
• Patient protections such as a choice of a primary health care provider,
coverage of emergency care when out-of-network, and direct access to pediatric, obstetrical and
gynecological care.
• Insurance companies will no longer be able to deny coverage or have exclusions because of pre-existing
conditions or current health.
• When starting a new job, coverage waiting periods over 90 days will no longer be allowed.
Even with the above changes, there will still be differences between fully insured and self insured plans (and differences
between fully insured plans depending on the size of the plan) so it is important to know what type of plan you have.
The Affordable Care Act has made some important changes to the choices you will
have for insurance. In 2014, each state will have an insurance “market place” on
the Internet called an Affordable Insurance Exchanges. Here people will be
able to shop for health insurance if they are unable to get it at work or if what
is offered at work is too expensive. Through the Exchanges, people will be able
to qualify for tax credits based on their income to help offset the cost of
insurance.
Employers will also be able to shop for insurance to offer their employees in a
Health Benefit Exchange made for small businesses. Employers will not HAVE to provide insurance but they will be encouraged
to - and encouraged to make it affordable. If you work at a place that has under 25 employees, then your employer can get tax
credits to encourage them to provide insurance to their workers, but they do not HAVE to provide it. If an employer has over 50
employees, they still do not HAVE to provide insurance, but if they don’t and their workers go to the Exchange to find insurance
AND their income is low enough that they are eligible for tax credits, then the employer will have to pay a penalty.
The Affordable Care Act will also affect Self Insured plans with new requirements that will make them more like Fully Insured
plans. These changes will affect all new plans and will include things like (please note this is not a complete list):
• Not allowing lifetime and certain annual limits
• No longer able to cancel a person’s policy due to an unrelated error- for example, a child has medical
bills due to a sudden illness. The insurance company suddenly finds the child ineligible for coverage
because acne was not included on the insurance application by mistake.
• Coverage of preventive health services
• Extension of dependent coverage to age 26
• Annual quality of care reporting
• Patient protections such as a choice of a primary health care provider,
coverage of emergency care when out-of-network, and direct access to pediatric, obstetrical and
gynecological care.
• Insurance companies will no longer be able to deny coverage or have exclusions because of pre-existing
conditions or current health.
• When starting a new job, coverage waiting periods over 90 days will no longer be allowed.
Even with the above changes, there will still be differences between fully insured and self insured plans (and differences
between fully insured plans depending on the size of the plan) so it is important to know what type of plan you have.
| Resource Booklet: How Private Health Coverage Works This publication is a great resource. (please note it was written in 2008, before the Affordable Care Act was passed in 2010) |
| Resource Article: Health Reform and ERISA |
| Cost Sharing and the Affordable Care Act Cost sharing is when you and your insurer each pay for part of your medical costs, like through a deductible or co-payment, which lowers premiums and costs. How will the new health care reform law change your co-pay? Click this video to learn more. |